Men’s Wearhouse Proposal Rejected By Jos. A. Bank

Men’s Wearhouse Proposal Rejected By Jos. A. Bank

The $55 per share of Men’s Wearhouse will be declined by Jos. A. Bank, which had earlier made an offer to acquire the company a number of weeks earlier. The steps taken by Men’s Wearhouse revived the self-styled Pac-Man defense, which is a popular 80s strategy where companies attempt to acquire a former suitor.

However, this strategy seldom works with only six out of twenty attempts resulting to successful deals. The company said it rejected the offer since it was inadequate.

A statement from the company indicated that the board of directors considered the proposal from Men’s Wearhouse considerably underestimated the value of the company for the near and long-term potential, and it did not consider the best interest of the stockholders of the company.

But the $55 per share offer for Jos. A. Bank was 32 percent higher than the share price of the company before it sent a bid for Men’s Wearhouse. Robert Wildrick, chairman of the company, said the board reviewed the offer thoroughly and decided that the proposal of Men’s Wearhouse did not have the best interest of the stockholders in mind.

Wildrick indicated the company will look into other proposals that may be beneficial for the company. The share prices of the company declined by 1.5 percent during pre-market trading.

However, it may be possible for Men’s Wearhouse to increase its bid to acquire the company. A number of analysts viewed the combination of the two companies positively, and would prefer Men’s Wearhouse to be the acquirer of the two companies.

But, the relationship between the two companies suffered from the turn of events. No statements were released by Men’s Wearhouse on the rejection of its offer by Jos. A. Bank.

Posted by James Fried on Wednesday December 25 2013, 4:25 AM EST. Ref: NY Times. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0